Budget deal helps Newman's Own avoid massive tax bill

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WESTPORT -

The budget deal means major relief for the iconic Westport-based Newman's Own.

Newman's Own was facing a 200 percent tax hit because of an obscure provision in the tax laws. However, today's budget deal rolls that tax hit back.

The company, which is owned by Paul Newman's foundation, takes all the money it makes from selling salad dressing and pasta sauces and donates it to charity. The IRS was about to hit the company with a massive tax bill.

"The issue we were facing was an unintended consequence of a tax law that goes back to 1969 that prevents private foundations from owning for-profit entities, which really became a problem upon Paul Newman's passing," says Jeff Brown, VP and Chief Administrative Officer of Newman's Own.

The tax law was meant to keep rich families from creating foundations to avoid paying taxes. The current budget deal now exempts groups like Newman's Own that give 100 percent of its profit to charity.

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